Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

At the end of January, the company estimates that the remaining units of inventory purchased on January 12 are expected to sell in February for

image text in transcribed

  1. At the end of January, the company estimates that the remaining units of inventory purchased on January 12 are expected to sell in February for only $100 each. [Hint: Determine the number of units remaining from January 12 after subtracting the units returned on January 15 and the units assumed sold (FIFO) on January 19.]
  2. The company records an adjusting entry for $3,000 for estimated future uncollectible accounts.
  3. The company accrues interest on notes payable for January. Interest is expected to be paid each December 31.
  4. The company accrues income taxes at the end of January of $12,300.

QUESTION 7 : Prepare an adjusted trial balance as of January 31, 2024.

The $30,000 beginning balance of inventory consists of 300 units, each costing $100. During January 2024 , Big Blast Fireworks had the following inventory transactions: January3January8January12January15January19January22January24January27January31Purchase1,200unitsfor$126,000onaccount($105each)Purchase1,300unitsfor$143,000onaccount($110each)Purchase1,400unitsfor$161,000onaccount($115each)Return100oftheunitspurchasedonJanuary12becauseofdefects.Sell4,000unitsonaccountfor$600,000.ThecostoftheunitssoldisdeterminedusingaFIFoperpetualinventorysystem.Receive$580,000fromcustomersonaccountsreceivable.Pay$410,000toinventorysuppliersonaccountspayable.Writeoffaccountsreceivableasuncollectible,$2,500.PaycashforsalariesduringJanuary,$128,000. January 3 Purchase 1,200 units for $126,000 on account (\$105 each) . January 8 Purchase 1,300 units for $143,000 on account ($110 each) . January 12 Purchase 1,400 units for $161,000 on account (\$115 each) . January 15 Return 100 of the units purchased on January 12 because of defects. January 19 Sell 4,000 units on account for $600,000. The cost of the units sold is determined using a FIFO perpetual inventory system. January 22 Receive $580,000 from customers on accounts receivable. January 24 Pay $410,000 to inventory suppliers on accounts payable. January 27 Write off accounts receivable as uncollectible, $2,500. January 31 Pay cash for salaries during January, $128,000. The following information is available on January 31, 2024. a. At the end of January, the company estimates that the remaining units of inventory purchased on January 12 are expected to sell in February for only $100 each. [Hint: Determine the number of units remaining from January 12 after subtracting the units returned on January 15 and the units assumed sold (FIFO) on January 19.] b. The company records an adjusting entry for $3,000 for estimated future uncollectible accounts. c. The company accrues interest on notes payable for January. Interest is expected to be paid each December 31. d. The company accrues income taxes at the end of January of $12,300

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services

Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley

12th Edition

0136128270, 9780136128274

More Books

Students also viewed these Accounting questions

Question

How flying airoplane?

Answered: 1 week ago